Tanzania will target average economic growth of 8% to 10% annually over the next five years to revamp the East African country’s agriculture, infrastructure and industrial sectors, its president said on Tuesday.
President Jakaya Kikwete said the 2011/12 to 2015/16 plan would boost investments in farming, power generation, roads, ports and manufacturing activity. It will also introduce reforms aimed at improving the business climate and good governance, as well as tackle corruption.
“The government targets annual GDP (gross domestic product) growth of between 8% and 10% and an inflation rate of below 5% over the next five years,” Kikwete said in a speech broadcast live by state television.
“Our economy is now growing at an annual rate of 7%, but this is not enough … Maintaining macro-economic stability and sound economic, fiscal and monetary policies are critical.”
Rising food and fuel prices pushed the inflation rate higher for a sixth straight month, to 8.6%, in April.
Tanzania is among the continent’s biggest per capita aid recipients and is expected to fund almost 29% of this year’s spending with the help of donors.
Tanzania and four other East African governments are due to present their national budgets on Wednesday.
Tanzania, East Africa’s second-largest economy, has been plagued by frequent power outages since December, prompting the International Monetary Fund to revise its 2011 growth forecast down to 6% from 7.2% previously.
Kikwete said Tanzania plans to generate more than 2 700MW of electricity over the next five years from less than 1 000 MW at present, by tapping natural gas deposits.
He said the rolling five-year plans he inaugurated on Tuesday were aimed at ensuring Tanzania becomes a middle-income country by the year 2025 with a per capita income of $3 000.
Tanzania will focus on increasing production of maize, rice and other crops to transform the nation into a net exporter of food, he said, and venture into non-traditional crops such as fruits, flowers, vegetables and spices.
Kikwete also said the government would target foreign reserves equivalent to cover six months of imports, up from five months.
“Our goal is to ensure that our exports account for 23% of the GDP and we achieve a revenue-to-GDP ratio of 19%. We also plan to raise the per capita income to $650 from the current $545,” he said.
“We need to ensure we achieve high economic growth and low inflation. The government will control spending and implement programmes and projects that will boost exports and improve our foreign exchange reserves,” he said. — Reuters